The economics and politics of instability, empire, and energy, with a focus on Latin America and the Caribbean, plus other random blather and my wonderful wonderful wife. And I’d like a cigar right now.

November 18, 2010

The unbearable lightness of Mexican law-and-order spending

Saturday is the official centennial of the Mexican Revolution. In its honor, Aldo Musacchio and I will be giving a pair of short talks at the Rockefeller Center for Latin American Studies. ¡Viva la Revolución social, compañeros!

Of course, a big part of the talk will be dominated by crime. Yesterday, the Calderón administration announced that the judiciary will receive a 10% boost in its budget ... but also 10% less than they had requested. Why is this a problem? Well, the proximate issue is that the country was going to open 71 courts to alleviate the current strain on the judicial system that will now not be opening. That’s a problem. It’s a worse problem in the context of the recent judicial reform, which introduced oran trials (as in the United States) and was designed to speed up the wheels of justice ... but which will now not be fully implemented.

It gets worse: Congress cut the budget for the Procuraduría General de la República (PGR) and the Secretaría de Seguridad Pública (SSP). The PGR is the nation’s chief prosecutor, while the SSP runs the federal police and prisons. How was this justified? Listen to Luis Videgaray: “Neither the budget of the PGR nor the SSP was cut. What was done was a cut in running costs, in the government’s bureaucratic expenditure, that had a marginal effect in all agencies. But I can guarantee that the President’s proposed budgets for the PGR and SSP remained intact.”

Uh huh. Look at the above graph. Mexico spends less than a third of the United States (at all levels of government) on courts, police, and prisons. Even if you say that every single bit of Mexican defense spending is in effect spending on law-and-order, Mexico spends less than half of its northern neighbor. It should be spending two or three times as much, maybe more. It is crazy. In fact, when you do finally read about a serious operational plan to reduce violence (courtesy of Gancho, who provides a translation and some wise commentary) it turns about to be an extremely labor-intensive operation ... and one which would benefit from having courts to prosecute the offenders, and reliable prisons to hold them. Moreover, it would benefit from a separate police force dedicated to monitoring the men on the ground, and higher salaries all around. Frex, the vetting process for police is ridiculously incomplete.

But sadly, the low spending is also understandable. Even with the recent tax reform, Mexico collects barely 12% of its non-oil GDP in taxes. At the same time, oil production is declining. U.S. help could fill the gap, but current levels are risible.

Can organized crime be combatted at such low levels of public spending? In the absence of serious tax increases, or massive American aid, the only thing I can say is: “I hope so.”